IRF Study Reveals 'Knowledge Gap' On Non-Cash Reward Regs

The Incentive Research Foundation recently released a research report entitled U.S. Federal Regulations and Non-Cash Awards that examines program owners’ understanding of the regulatory environment and discusses how they’re adjusting their programs in an effort to accommodate these regulations.With a focus on key regs such as DOL Fiduciary Rule, 274j, OSHA, FLSA, Fair Market Value and Sweepstakes/Lottery guidelines, program owners note that they’re “highly aware” of regulatory and tax codes, but less knowledgeable about how to comply with them. Many program owners say they find regulations unclear and challenging to accommodate, but are making numerous changes to their programs in an effort to comply.Key findings of the study include:

Roughly two-thirds of program owners (67%) are aware there are regulatory considerations for their programs

For the smallest businesses surveyed, the awareness level drops to 57%

Only 38% of program owners consider themselves “very knowledgeable” about regulations and tax requirements

Fewer than two-thirds of U.S. businesses surveyed have formal compliance mechanisms in place to address these requirements

86% of businesses make some revision to their rewards program on an annual basis, and half of U.S. businesses made eight or more changes to program design based on the regulatory environment in 2017

The most common design revisions are to general program design (87% of businesses) or program communications (85%)

The survey was conducted in the summer of 2017 and looked at a cross-section of 419 businesses, 106 of which operate in the financial services sector. Program owners were targeted based on sector and revenue size.

“Not surprisingly, over half of U.S. businesses have increased the dollars invested into programs to accommodate changes, and close to half have increased staff support,” says IRF President Melissa Van Dyke. “We anticipate more and more resources will continue to be dedicated to understanding and accommodating regulatory requirements for non-cash awards programs, especially as these regulations themselves continue their refinement.”